Cheesed off

The Sage’s reproach of the Cadbury bid leaves Irene Rosenfeld with few palatable options. At best, she tweaks it to address Buffett’s concerns about share issuance. At worst, the bid fails. Either way, she can’t undo a rare public scolding from the world’s most admired investor.

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Berkshire Hathaway voted against a proposal by Kraft Foods to issue up to 370 million shares to fund a hostile acquisition of Cadbury.

To state the matter simply, a shareholder voting ‘yes' today is authorizing a huge transaction without knowing its cost or the means of payment, the company said in a statement.

Prior to the Berkshire statement, Kraft had increased the cash component of its offer following the sale of its U.S. pizza business to Nestle for $3.7 billion.

In November, Kraft made a formal offer for Cadbury shares, including 300 pence in cash and 0.2589 Kraft shares, worth 442 pence taking Kraft's closing price of $27.43 on Jan. 4 and a dollar/sterling rate of 1.605.